Gamers ask Supreme Court to block Microsoft-Activision Blizzard deal

WASHINGTON (CN) — On Monday a group of video game players asked the Supreme Court to block a $69 billion deal that would merge Microsoft and gaming giant Activision Blizzard. 

“The merger between Microsoft and Activision would be one of, if not the largest technology mergers in history, at a time when concentration among technology companies is already threatening the competitive balance of our economy and even our political systems,” Joseph Alioto Sr., an attorney with Alioto Law Firm representing the group, wrote in their application (emphasis in original). 

The move comes after the Federal Trade Commission lost its bid to block Microsoft’s purchase. Activision Blizzard is home to some of the most popular game franchises in history like Call of Duty, World of Warcraft and Candy Crush. The news of a merger between the giants spiked worries over exclusivity deals that could manipulate pricing and withhold games from competitors like Nintendo and Sony. 

Without high court intervention, the merger will go into effect on Tuesday night. Gamers in the suit are urging the Supreme Court to preserve the status quo while appeals on the controversial merger move through the courts. 

Filing their antitrust suit in December, the gamers argue the merger would reduce competition in the video game industry. 

“In addition to drastically lessening competition in the video game industry, this merger would take a giant leap toward untenable market concentration that is without question unlawful under Section 7 of the Clayton Act,” Alioto wrote. 

The gamers claim the district court — which ruled in Microsoft’s favor — made an error by not even hearing arguments on the merits of their suit before allowing the merger to take place. 

“For from any minute accretion of power, this merger is enormous and will substantially lessen competition,” Alioto wrote. “Yet the district court has accepted Microsoft’s erroneous position that they can merge without even allowing plaintiffs to be heard on the merits.” 

The district court allowed Microsoft to only address claims that consumers would be threatened with irreparable harm to decide if a preliminary injunction should be granted. Finding that they would not, the district court refused to block the merger. 

While the gamers’ suit proceeded, the FTC filed its own challenge to the purchase. The gamers attempted to join the government’s suit but were shut down. After the district court ruled in Microsoft’s favor in the FTC suit, the gamers asked the Ninth Circuit to block the deal. The appeals court declined, moving the fight to the high court. 

The gamers attempt to separate their suit from the government’s effort to block the purchase. 

“The FTC proceeding was governed by different theories, different parties, and different law,” Alioto wrote. “While the FTC continues to operate under the merger guidelines, the merger guidelines are not the law and Plaintiffs are not constrained by them. Further, Plaintiffs’ theories of why the merger might substantially lessen competition are different than the FTC’s.” 

If the deal goes through, the FTC has argued that Microsoft will gain access to Activision’s operations and business plans. This would include sensitive information concerning the company. The gamers argue this would result in irreparable harm. 

“The public interest has a strong interest in preserving competition in the marketplace, particularly in the case of a multibillion industry effecting dozens of businesses and millions of consumers,” Alioto wrote.

The emergency application was submitted to Justice Elena Kagan, who presides over appeals from the Ninth Circuit. The court has not yet responded to the appeal. 

Follow @KelseyReichmann

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